Colbert Case Puts FEC in Rare Limelight

The Federal Election Commission on Thursday will consider whether comedian Stephen Colbert can use a media giant's resources to promote his own independent expenditure-only political action committee. With Colbert slated to attend, the hearing has quickly turned into a Washington media circus.

But beneath the allure of a bona fide celebrity attending a sleepy FEC hearing lie deeper questions about the impact an FEC ruling could have on a law that exempts media organizations from campaign finance reporting requirements.

In March, Colbert broached the idea of creating a political action committee during his nightly show on Comedy Central. With the help of former FEC chairman Trevor Potter, the political satirist filed a request for an advisory opinion with the FEC in May. Colbert and his attorneys, including Potter, requested a press exemption from the commission to would allow Colbert Super PAC to use the resources of his parent company, Viacom, to create independent expenditure ads for the upcoming campaign cycle, without having to report Viacom's contributions as "in-kind."

In filing the request, Colbert is seeking to take advantage of an exemption traditionally used to allow media outlets to report and comment on campaigns and endorse candidates without having their work considered “in-kind” political contributions, triggering filing and disclosure requirements with the Federal Election Commission.

The request comes down to one essential issue: whether Viacom can legally donate production costs, airtime and use of Colbert's staff to create ads for the so-called super PAC, to be played both on "The Colbert Report" and as paid advertisements other networks and shows.

If the FEC grants Colbert a press exemption, the decision could have a drastic effect on media involvement in federal elections, potentially opening the door for media outlets that employ politicians as commentators to aid favored candidates through undisclosed contributions. Those figures include Fox News contributor Karl Rove, who founded American Crossroads, and former Ark. Gov. Mike Huckabee (R) who heads "Huck PAC" and hosts a show on Fox News.

Several campaign finance reform advocates are expressing concern over three proposed changes the FEC will consider on Thursday. Granting Colbert's request in full, they argue, would allow media companies to anonymously fund the political activities of their employees, under the protection of the FEC's press exemption.

Several groups filed briefs on Colbert's advisory opinion, warning the FEC of the consequences of granting the request. But here's where the relationships get awkward: One group expressing outrage is the Campaign Legal Center, of which Potter himself is president and general counsel. The CLC and another group, Democracy 21, filed a joint commentary on the advisory opinion urging the FEC to tread lightly when granting Colbert's press exemption.

Granting the exemption would produce what the reformers called "a sweeping and damaging impact on disclosure laws," which would allow media companies to fund employees' political activities anonymously. Politicians who are employed by media companies could use their television shows as platforms to raise unlimited funds for their PACs, without having to disclose it, the reform groups said.

Additionally, those media companies would be allowed to anonymously pay for independent expenditure ads for those PACs, which could then be played on other networks and shows, as well as online. Media companies (Including Fox News, which employs several political figures associated with super PACs) could fund the administrative costs of their employees' PACs, without having to disclose that donation.

"Mr. Colbert's ultimate goals here may be comedic," the reformers wrote. "But the commission should not be the straight man at the expense of the law."

Potter told National Journal in May he had built a firewall between his work for Colbert and the Campaign Legal Center. And he maintained the request is no joke: "Because it's Mr. Colbert, the request has elements of humor in it," he said. "But the question we are asking is a serious one. The Super PAC needs to know how to report its activities."

The FEC will consider three draft opinions at Thursday morning's hearing, all placed on the calendar by FEC chairwoman Cynthia Bauerly, a Democratic appointee. All three grant Colbert a press exemption, to a point.

The three drafts give Colbert permission to discuss his PAC on-air and use his staff and other Viacom resources to create independent expenditure ads for use on the "Colbert Report" and its website, without having to disclose those activities as in-kind donations by Viacom. The major difference between the three drafts is whether they would allow Viacom to then donate those ads to the committee for use on the PAC's website and as paid advertisements on other shows and networks, as well as whether Viacom can pay the operational costs for the committee without having to report that as a donation to the PAC.

Draft A, the most limiting of the three, argues that as soon as Viacom donates an ad for use outside of the show or foots the bill for administrative costs, it ceases acting as a member of the press and begins electioneering. In other words, Viacom would have to report that donation on financial disclosure forms, something the company does not want to do.

If adopted, Draft B would allow Viacom to fund independent expenditure advertisements for Colbert Super PAC that would air outside of the context of Colbert's show, without having to report it as a donation. The draft focuses on the First Amendment, arguing that coming to "a different conclusion" -- as in Draft A -- "would require the commission to substitute its judgment for that of the press entity on how best to deliver news, commentary and editorials."

Draft C takes a slightly different, but important, approach, comparing the ad time Colbert intends to buy on other shows to ads Viacom might run to promote its own programming on other networks, "where the underlying activity being promoted is itself."

Both Drafts B and C would allow Viacom to pay for Colbert PAC's operational costs, saying that if the committee ceases to exist, Viacom's coverage of it - a "press function" - would end as well. All three would allow media companies to pay for their employee's independent expenditure ads in 2012.

The final Advisory Opinion must be granted before July 12, 60 days after Colbert's request was filed. But for a commission that has trouble reaching consensus on even the most basic opinions, corralling four votes on any option may prove too difficult.

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